An aggressive sell-off on Wall Street drove U.S. equity prices to yearly lows, as worries about the developing situation in Europe overshadowed positive reports related to manufacturing and construction indicators.

At 3:14 p.m. Eastern Standard Time, the benchmark Dow Jones Industrial Average had dropped 1.71% to 10,726.90 . The wider S&P 500 index had lost 2.07% and was trading at 1,107.96. The tech-heavy NASDAQ Composite sat at 2,354.22, down 2.53% from the previous day's close. Were those numbers to stand, the would leave the indices mere basis points away from new 52-week lows.

The rate of decline in the value of the equity markets dropped most notably after 2 p.m., when the S&P 500 index first traded under 1110. It is common for dramatic declines to occur after indices go under numerically significant floors, as approaching said targets prompts traders into accelarated selling.

Earlier in the day, stocks had risen after a report showed an unexpected increase in U.S. manufacturing production. A separate economic indicator from the Commerce Department also released today noted construction spending in the U.S. had rebounded in August. However, those early gains were erased as the sovereign debt crisis in Europe and fears of a global slowdown overshadowed improving economic reports according to Bloomberg News.

According to data from Bloomberg, companies in the S&P 500 index are trading at 10.2 times 2012 forecast earnings, compared with the average in economic contractions since 1957 of 13.7. It is possible analysts are expecting earning estimates to be pared down before the ends of the year.